Opinion: The bedroom tax – chaos and misery

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Legal challenge to NLA/NFRL merger fails

By Phil Morgan, housing consultant and former TPAS chief executive

The revelation that up to 40,000 tenants may have been wrongly assessed for the bedroom tax is a further indictment of the poor handling of the tax (or spare bedroom subsidy if we’re to follow the government’s Orwellian title).

Ironically if these tenants have received discretionary housing payments then they would be entitled to keep them, making a further net cost for a tax that was designed to save money as part of an austerity drive.

The bedroom tax costs money. It is costing money to administer. Local authorities are having to spend more money sorting out significant backlogs of claims and managing claims for discretionary housing benefit. Social landlords are having to spend more time and money talking with tenants affected by the tax. Arrears rise, with a loss of income, and more money again is spent trying to manage this.

Evictions will inevitably rise too with further costs. Some social landlords are now finding difficulty filling properties which are now made unviable by the tax threatening both investment in those homes and the longer term viability of that landlord. The wrong assessment of tenants will further add to costs with the inevitable claims, referrals to the Local Government Ombudsman and uncertainty.

The bedroom tax also costs money when tenants leave social housing and move into the private rented sector. As these rents are often higher there are increased claims for housing benefit at a net cost to the taxpayer. Furthermore the bedroom tax is distorting future housebuilding as more smaller properties are built resulting in less bedroom capacity for the investment in new building.

Are there any glimmers of light? Some landlords really do have to get closer to their tenants to ensure their rental stream is protected. But this is outweighed by the misery felt by “hard-up tenants are worrying about how to feed and clothe their families while struggling to meet the shortfall in their rent” - Aragon Housing, 100 Days of the Bedroom Tax.

There have always been better solutions. Social landlords have had in place innovative schemes to support downsizing. If the government were serious about releasing bedroom space then supporting good practice and reinforcing this through value for money polices would be a subtle and undramatic way forward. If tenants, especially older tenants, are given real choices about where they live then they do move to the benefit of all involved.